The accounts of Cookie Lapp eTravel, Inc., at December 31, 20X5, are listed in alphabetical order.

Required
1. All adjustments have been journalized and posted, but the closing entries have not yet been made. Journalize Lapp's closing entries at December 31, 20X5.
2. Set up a T-account for Retained Earnings and post to that account. Then compute Lapp's net income for 20X5. What is the ending balance of Retained Earnings?
3. Did Retained Earnings increase or decrease during the year? What caused the increase or decrease?

Transcribed Image Text:

Accounts payable Accounts receivable.. Accumulated depreciation- $5,100 Note pay able, long-term. $10,600 3,600 Retained earnings, 5,300 24,600 3,900 11,600 December 31, 20X4... Advertising expense....2,200 Salary expense 7,300 Salary pa yable Common stoc Depreciation expense Dividends Furniture Interest expense 1,300 Supplies 47,400 Supplies expense.. 41,400 Unearned service 7,700 5,700 800 revenu 3,600